What is CIBIL Score?
“The works you do in the past, you have to pay for them in future”. This line would exactly go for those who have bad CIBIL or say credit score. In need of an urgent loan for treatment, education or wedding, a bad credit score can cause you to lose the loan.
What is CIBIL or Credit Score
Here, the CIBIL score is actually a database or track record of his/her all the previous loans, which includes repayment history, regularity, irregularity, causes for late instalment everything aspects. According to RBI, all these parameters have to be taken in consideration before lending loan, which decides the credit worthiness of the borrower. Therefore, if you have poor score, you are less trust worthy.
There are different ways to improve your CIBIL score. So, let’s have a look on these effective ways
• Check and Clean Credit card
Checking your credit card and analysing it on weekly basis would actually be very beneficial in improving your score. First of all go through all your dues and pending instalments and clear it off. Second by getting details regularly, will help you to plan that how to fix negative information in your credit score. In case of any errors or misconception you can visit banks to clear it, which perhaps increase your score.
• Just keep it Less than 3
Possessing just one or two credit cards is enough. It is actually quite easier to maintain the balance; you can easily pay your outstanding amount in time and can track it easily. Also, don’t apply again and again if once your application is rejected. Wait for your score to improve first and then try it.
• Use the highest score credit card maximum
Often, people deal with a myth that using older credit card which is not currently used should be deactivated. Perhaps, it is correct but if the account has high score than it must be continued. A good credit card account, managed well over long period will actually give an impetus to your credit score. The longer you hold these cards, the better your CIBIL score would be.
• Equate Every Monthly Installment
Generally, we take big loans on a four wheeler or to buy house. These big loans have big EMI’s, which should be paid regularly. Don’t delay these loans as they have major effect on CIBIL score. In case of credit card loans repayment, try to not come closer to the limit. Just keep it low and repay at least sizeable amount regularly.
• Be Aware of Joint Accounts
Watch out for any loans on joint account. In this you may suffer if the other half default on loans repayment, you too also lose credit scores and the same goes vice-versa. So, be very careful on lending loans on these accounts.
The situation is very difficult to handle, when you apply HDFC bank personal loan or any top banks and you have a bad credit. It can be repair almost on any level but, it is strongly advices to maintain good score from beginning, which will be very helpful in emergency.